2025 Global Claims Study Highlights Record $1.75B in M&A Insurance Payouts

DUBLIN – July 11, 2025 – Aon plc (NYSE: AON), a leading global professional services firm, has released its 2025 Transaction Solutions Global Claims Study, revealing that insurers paid out over $1.75 billion in mergers and acquisitions (M&A) insurance claims globally, underscoring the critical role of Representations and Warranties (R&W) and Warranty & Indemnity (W&I) insurance in managing deal risks.

The study, conducted with Mergermarket, highlights a surge in claims activity, with $300 million paid in North America alone in 2024 and a 26% increase in claim notifications in Europe, the Middle East, and Africa (EMEA). In the Asia-Pacific (APAC) region, the rise in W&I policy placements reflects growing M&A activity, positioning insurance as a vital tool for dealmakers navigating complex risks.

M&A Insurance Market Overview

The global M&A insurance market has matured significantly, with R&W/W&I insurance becoming a cornerstone of deal structuring. In 2024, global M&A activity reached $3.6 trillion across 38,000 deals, a 15% increase from 2023, driven by technology, healthcare, and renewable energy sectors.

The M&A insurance market, valued at $20 billion in premiums in 2024, saw 1,200 deals bound globally, with APAC premiums growing at a 38.1% CAGR, the fastest globally. This growth reflects increased adoption in Asia, where 20% of W&I policies faced claims, often tied to compliance, financial statements, and tax issues.

Key market trends include:

• Broader Coverage: Insurers are offering expanded scopes and lower retentions, with 10% premium discounts in APAC through innovations like Aon’s Sidecar for excess capacity.

• Claims Maturity: The $1.75 billion in global payouts, with $500 million for claims filed over 12 months post-closing, highlights the extended value of R&W coverage beyond traditional escrow periods.

• Tax Insurance Growth: Notification frequency for tax insurance reached 13%, driven by renewable energy tax credit disputes, with 46% of North American tax claims linked to such transactions.

• Regional Dynamics: APAC’s rise in W&I policies contrasts with North America’s steady claims volume (950+ claims since inception) and EMEA’s 26% notification surge, reflecting regional market maturity.

Challenges include rising claim severity, with average loss estimates increasing from $11.7 million (2016–2019) to $13 million (2020–2023), and regulatory complexities in cross-border deals, particularly in APAC.

Key Findings from Aon’s 2025 Claims Study

The study, based on Aon’s proprietary data and surveys of 18 North American and 14 EMEA insurers, provides detailed insights:

• Global Claims: Aon clients filed over 1,600 R&W/W&I and tax insurance claims, securing $1.75 billion in payouts, with $500 million from claims notified over 12 months post-closing.

• North America: Aon clients received $300 million in 2024, with 39 paid claims and a record median payout of $5.5 million. Compliance with laws (20%), tax (17%), and material contracts (13%) drove claims. 49% of claims were filed post-12 months, totaling $400 million in losses.

• EMEA: Insurers paid $70.9 million in 2024, representing 35% of total EMEA payouts to date. Financial statements (27%) and tax (26%) were top breach types, with a 26% increase in notifications.

• APAC: Approximately 20% of W&I policies saw claims, with 30% of India-based claims tied to tax issues and 30% of Australia/New Zealand claims linked to disclosure breaches. Smaller deals (<$500 million) dominated claim frequency.

• Industry Trends: No single sector stood out, but retail/consumer sectors saw high compliance breaches, financial services faced material contract issues, and energy firms reported asset condition breaches.

Comparison of Regional M&A Insurance Markets

Below is a comparison of M&A insurance markets across North America, EMEA, and APAC, based on 2024 data:

Analysis

• Payout Scale: North America leads with over $1 billion in total payouts, reflecting its mature market and high M&A volume (6,800 deals in 2018). EMEA’s $200 million and APAC’s $50 million indicate growing but less developed markets.

• Claim Drivers: Compliance and tax breaches dominate across regions, but EMEA’s focus on financial statements reflects complex accounting standards, while APAC’s disclosure issues in Australia/New Zealand highlight due diligence gaps.

• Market Maturity: North America’s high claim volume and 49% late notifications show policyholder awareness, while EMEA’s 26% notification increase signals maturing adoption. APAC’s 38.1% CAGR reflects rapid growth, particularly in India and ANZ.

• Innovations: APAC’s Aon Sidecar offers 10% premium discounts and $70 million in excess capacity, unique to the region. North America’s tax insurance focus on renewables addresses sector-specific risks, while EMEA emphasizes broader W&I coverage.

Outlook and Implications of M&A Insurance Claim

The $1.75 billion in global M&A insurance payouts reflects the growing reliability of R&W/W&I and tax insurance as risk transfer tools. The 38.1% CAGR in APAC premiums signals robust demand, driven by China’s $540.8 billion insurance market and India’s tax-related claims.

However, rising claim severity ($13 million average loss estimate) and regulatory complexities pose challenges, particularly for smaller deals. Insurers’ focus on efficient claims handling, as emphasized by Aon’s Claire Fleetwood, is a key differentiator, with 39% of North American claims settling within retention and 17% resulting in payments. As M&A activity grows, with 2025 projections anticipating a 10% deal volume increase, M&A insurance will remain critical for de-risking transactions.

Consult Everbright Actuarial Consulting for Expert Guidance

To navigate the complexities of M&A insurance or leverage R&W/W&I policies for your deals, contact Everbright Actuarial Consulting at info@ebactuary.com . Our team provides tailored risk assessments, claims support, and strategic solutions to optimize deal outcomes in the evolving M&A landscape. Reach out for consultations or educational resources to enhance your risk management strategy.